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FTV Capital backs InvestCloud with $45 million investment

Deal leaves private equity group’s fourth fund 60% invested.

FTV Capital has backed Southern California financial software company InvestCloud with a $45 million growth equity investment.

The deal came from the San Francisco private equity group’s $700 million FTV IV fund, which leaves its 2014-vintage fund about 60 percent invested to date, said FTV managing partner Richard Garman.

“Our Fund IV takes the same approach to investing that we have deployed since our founding, which is to focus on high-growth companies operating in three industry segments – enterprise solutions, financial services and payments or transaction processing – where we have strong domain expertise and we emphasise proprietary sourcing,” he said.

FTV, which has 88 portfolio companies, typically invests $10 million-$75 million of equity in businesses with an enterprise value of $100 million, making either growth capital or control-oriented investments in the companies in which it invests, Garman told Private Equity International.

“We are transaction agnostic when it comes to control versus minority. Historically, if you look back at our investments, about 35?percent are control-oriented with the remainder being significant minority in nature,” he said.

FTV has generated around $635 million in exits this year, largely through sales of portfolio companies to strategic buyers that have resulted in at least $500 million in distributions, Gorman said.

InvestCloud will use the investment to expand its sales and marketing operations, as well as launch offices in London and Zurich next year. The five-year-old company offers software for administrative, reporting, data use and other uses to wealth advisors, family offices, pension funds, endowments, hedge funds and other financial service businesses.

Garman will join InvestCloud’s board as part of the deal.